Tuesday, May 11, 2010

City Council lemmings

Cincinnati City Council at Finance Committee on Monday marched 6-2 (NO = Monzel + Winburn) off a cliff of debt, by voting to issue $64 million in bonds to build the trolley. The Enquirer reports on the foolhardy plan here.

Additionally, during a line of questioning initiated by Councilman Chris Monzel, the City Administration admitted they have no plan in place for operating costs of the system (Plan?We don’t need no stinkin’ plan!) but instead threw up some suggested resources that could be used to operate the trolley, including the farebox, advertising, trolley-stop sponsorships and -- get this – specialassessments (new tax) on property owners.

As if in slow motion, Council is irretrieveably driving itself into deeper and deeper financial trouble, unable to break the cycle of debt that is gripping our City, State, and Nation.It’s like they're living in Candy Land and playing with Monopoly money. Taxpayers be damned.

The issuance of the bonds will voted on by the full Council this Wednesday, May 12 at 2:00 pm.

9 comments:

We have 2 of 3 car companies in bankruptcy, a huge oil spill in the gulf, declining auto ownership, yet COAST remains silent on the Brent Spence Boondoggle -- the bridge to nowhere. If vehicle ownership and miles driven are on the decline, and gas prices will inevitably top $5/gallon, why are billions being spent on a bridge whose capacity anticipates an expanding CVG airport instead of one that's experienced a precipitous decline?

I hesitate to comment on here because I'm not at all convinced that anybody reads what you write but those of us who disagree with you, but ok, I'll bite:

When you comment that Council is "unable to break the cycle of debt that is gripping our City, State, and Nation," I assume that by 'debt' you mean 'spending more than earning,' correct? Here is an idea: let’s bring in more money. I know, I know, when I say that you think"[gasp!] Taxes? NOOOO!!!!!!" But that's not what I mean.

I mean we need a stronger revenue source, to actually, you know, BUILD our tax base. Let's break it down - if the city cost $10 a month, and one person lived there, that person would have to pay... yep. 10 bucks a month. But if TWO people lived there, each would only have to pay five bucks. And put 10 people there? Golly gee, costs are down to just a buck per person. Increasing residents and business increases revenue without the need to raise taxes. Pretty cool, huh?

One final note: please pick a side. If you think the streetcar is a terrible idea because you don't believe it will help spur economic development, fine. We can discuss that. Or if you believe that the streetcar should not happen because Councilmember Bortz works for a company that owns about 1% of the land that increase in value because the streetcar will cause economic development, fine. But for the love of all that is good, just freeking pick one. Then stick with it.

Unless of course you don't actually have legitimate, verifiable reasons to be against it…

It's hard enough tackling all the local boondoggles. They sprout up faster than we can whack them down. Surely you're aware of how difficult it is to accomplish anything against the federal juggernaut.

Why don't you get something going and we can meet to coordinate our efforts.

We bat a little better than .500, and we step up to the plate quite a lot. No other local political organization comes close.

David,

The trolley boondoggle cannot attract enough new residents to justify its ginormous cost. Let's run the numbers:Assume each new resident makes $100,000/year, at 2.1% earnings tax, s/he pays $2100 to the city. $128 million divided by $2100 = 60,952 new residents required to break even. Factor in the promised 2.7:1 cost/benefit ratio, and we would have to get 164,571 new residents for trolleyites to keep their promise. How realistic is it that we will see 50% population growth from six miles of streetcar line?

If we manage to get 6000 or so new residents that can be directly correlated to the streetcar, then we've essentially paid $100 for a $10 bill. Not a solid plan for the long term success of the city.

1. Isn't the earnings tax for those who work in the city, regardless of where they live? It is based on the place of employment, not the place of residence, right? I ask because I honestly do not know.

2. Bringing in residents will increase the income tax base.

3. Beyond increasing the number of residents, the streetcar will increase the number of businesses there. This will increase the earnings tax base (employees) as well as the sales tax base (on each transaction).

4. All of these things will collectively increase the property values of each of these woefully underused (or abandoned) buildings, increasing the property tax base.

Of course according to you, the streetcar will produce none of this. Except for the couple of Chris Bortz buildings, which will somehow make billions. You know people see right through this flawed logic, right?

1. Anyone who lives or works in a city owes earnings tax to it. Credit is given to tax paid in other jurisdictions. If you live in Cincy and work in a township, you owe 2.1% to Cincinnati. If you live in Cincy and work in Evendale, you pay 1.2% to Evendale and 0.9% to Cincy. Many have figured out that living and working outside cities is best, and populations have shifted accordingly.

2. Yes, luring residents into a city improves its tax base. But people only make that choice if the value they get is worth the extra cost.

3. You say that as if it were certain. Who's guaranteeing that? Employees do boost tax base, but how do you get to 61,000? Sales tax goes to county & state, not city.

4. Property tax goes to county and state, a pittance goes to city. Cincy rebates most of it to incentivize living here. TIF captures small portion of the increase for Cincy. If we're lucky, it might cover cost of trolley borrowing.

Never said trolley was zero benefit, just that cost dwarfs benefits. We're spending a dollar to buy a dime. It's a recipe for insolvency.

The Provost is not interested in providing solutions to the Brent Spence project. He would rather have a bomb to throw at COAST. Provost is too lazy to get up off of the couch to lead a movement for something he believes in. He's much more interested in sniping from the sidelines and bitching at others.

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COAST exists to limit the rate of taxes and spending at the federal, state, and local level to within the rate of inflation and to stop the abuse of power by government officials.

COAST advances this cause by consistent and principled adherence to limited government and lower taxes in fighting legislation and ballot initiatives that increase taxes and spending beyond the rate of inflation, and by supporting candidates for public office who advance these principles.